This competitive renewal will examine the impact of the California minimum nurse staffing legislation on nurse staffing, hospital financial performance, quality of care and nurse wages. To do this, we will use a pooled cross-sectional sample of hospitals and a comparison-group design (California hospitals as the 'experimental" group;hospitals in states where no minimum nurse staffing has been implemented as the 'comparison" group) from 2002, prior to implementation of the legislation, through 2006, two years after implementation of minimum nurse staffing ratios for the majority of clinical services. We will also focus in more depth on California hospitals - their staffing, financial performance and quality, before and after implementation of the legislation. We will examine: (1) actual change at the service level (medical-surgical, definitive observation [stepdown, telemetry], pediatric, psychiatric and obstetrics) in staffing ratios and mix of registered nurse, licensed vocation nurse, and non-nurse staffing;(2) change in contract hours for registry nurses;(3) change in hours worked by RNs;and (4) change in community benefits (change in uncompensated care and change in expenditures associated with the formal education of residents, nurses and other health professionals). To do this, we will examine a panel of California hospitals longitudinally from 2002 - 2006. We will use data from multiple data bases, including AHRQ's Patient Safety Indicators and In-patient Quality Indicators from the Healthcare Cost and Utilization Project. We will use the legislation to construct instrumental variables to test for the existence of (and control for) potential endogeneity of nurse staffing and quality of care with a difference-in-differences estimator, enabling us to draw strong policy conclusions. Our study is relevant to the mission of AHRQ in terms of understanding hospitals'strategic decisions in relation to a scarce resource -- registered nurses - and the ways in which such decisions might influence difficult cost-quality tradeoffs in today's high-intensity, high-cost acute care hospitals. Public Health Relevance: This study will determine whether California's nurse staffing legislation led to improvements in the quality for that state's hospitalized patients, whether access to care for the indigent was affected by the legislation, and whether hospitals changed the amount of money they spent on educating future nurses and physicians.